Vitaliy N. Katsenelson, CFA, is a portfolio manager/director of research at Investment Management Associates in Denver, Colo. He is the author of “Active Value Investing: Making Money in Range-Bound Markets” (Wiley 2007). To receive Vitaliy’s future articles by email send a blank email to ...

Microsoft Vista and What It Means to Your Practice

Are you thinking about going out and buying a computer today? My advice would be to wait. Within a few weeks, Microsoft will be releasing a replacement to the Windows XP operating system called Vista. It will also be releasing Microsoft Office 2007, which is a radical departure from the previous version of Office. Computer manufacturers will sell you a PC today with a free, or almost free, upgrade to Vista when it is released, but I strongly advise against this course of action unless you have no choice and must replace a stolen or destroyed computer.

The reason I advise patience is simple: Upgrading an operating system is an experience you'd rather avoid. If you upgraded from a previous version of Windows to XP, as I did, you know that upgrading an operating system can be nerve wracking and time consuming under the best of circumstances; if something goes wrong, it only gets worse.

Whether you will be buying a new computer now, next month, or later, it is helpful to understand the minimum Vista requirements provided by Microsoft as a starting point. When referring to computer systems sold today that run on Windows, Microsoft offers two different standards: Vista Capable PC and Vista Premium Ready PC. While they may sound similar, there is a world of difference between the two.

To be Vista Capable, a computer must include at least a modern processor: at least 800MHz, 512 MB of RAM, and a graphics processor that is DirectX 9 capable. If you purchase a computer meeting these specifications today and you hope to upgrade it to Vista, you will almost certainly be disappointed. That is because this configuration will not support Aero graphics, one of the most anticipated Vista features. Aero provides features such as see-through frames, mousing over minimized windows to view their contents, and Windows Flip, which displays thumbnails of your open Windows in 3D. In fact, the only thing that this configuration is likely to support is the most basic version of Vista (called Home Basic), and I question whether it will even do that well.

Vista Home Basic is one of five versions of Vista to choose from; that's right, I said five! If you purchase a new PC, you'll want to make sure you purchase the right version of Vista for you, and you'll probably have four versions to choose from: Vista Home Basic, Vista Home Premium, Vista Business, and Vista Ultimate. The fifth version, Vista Enterprise, is designed for large global enterprises, and it is only available to volume license customers.

Vista Home Basic does not include Aero, and it is the system that will ship on the cheapest home PCs. It will probably suffice for Web surfing, e-mail, and basic word processing, but why bother?

If you are a solo firm with no need for networking or a remote desktop, Vista Home Premium might be an option. This version includes Aero, Flip 3D, Windows Tablet and Mobility support, Windows Meeting Space (for basic collaboration), and Widows Media Center. With Vista Home Premium, you get personal productivity tools plus good audio, video, and mobile computing support.

For financial professionals, I recommend Vista Business or Vista Ultimate. Vista Business lacks the Windows Media Center, but it includes business networking, remote desktop, and business backup.